"Developers can't afford to lower prices too much because they have projected their earnings and rates of return while we were enjoying a very buoyant market, but the market has changed dramatically over the last year. Overall, I believe the situation in the property market is going to get a lot worse before it gets better, and it could be anything up to two years before we begin to see a change for the better."

Sandy Gilmour, of property consultant Drivers Jonas, said: "There will definitely be a slowdown of development over the next two years as it will become increasingly difficult to get funding for speculative development.

"Traditionally, developers have funded schemes using bank debt to build on a speculative basis.

But banks just won't lend for that type of scenario anymore because there is too much risk involved, and the present crisis the finance sector is facing will undoubtedly have a significant impact on every city centre in the UK."

Iain Mercer, managing director of Edinburgh-based Cosmopolitan Investments, says moves and expansion plans are being put on hold due to the uncertain economic climate.